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Capitalisation

Jaspal Singh (Student) (8 Points)

29 March 2020

What is the minimum amount for asset to be eligible for capitalisation?

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(Guest)

There is no minimum amount for capitalisation of an asset is defined by any Act or Accounting standards in India.

Capitalization of an assets is determined by various factors like nature of asset, use of fixed asset by entity, useful life an asset, cost of the asset, Nature of the business of an entity etc.

So cost of an assets is one of the factors among others.

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RAJA P M ("Do the Right Thing...!!!") (127140 Points)
Replied 29 March 2020

Yes... I agreed to Mr Karan Singh views...

Well said Mr Karan Singh...

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Spurto Consultancy Services (Consultant) (1891 Points)
Replied 29 March 2020

Yes, there is no minimum amount for an expense to be categorised as a Capital Expenditure

The nature of expenditure, useful life of the asset, cost of the asset, use of asset in the business etc. All theses factors determine whether it is an asset for the entity or not.

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